Păun Ion OTIMAN

Institute of Agricultural Economics, Romanian Academy, Bucharest

otiman@acad.ro

ROMANIA’S AGRI-FOOD AND

RURAL DEVELOPMENT STRATEGY

ABSTRACT

Romania’s agri-food and sustainable rural development strategy, consensual from the
political point of view, should be the output of an objective scientific analysis of the agricultural and
forestry potential, and adapted, endorsed and supported by all the political and technocratic forces,
under the form of a vector of development, with important objectives and legal reform and
restructuring procedures, as support or vehicle for their implementation.
The agri-food and sustainable rural development strategy (vector of development) has the
governance programs as support or implementation vehicle, which, in our opinion, should represent
a coating, a coverage of the strategic vector and not a factor of permanent severance of the strategy,
as things have happened in Romania with the successive governments in power after 1989.
The agricultural strategy objectives were formulated starting from the functions of the rural area
and economy, of the Romanian agriculture, the need of their fast development, the new partnership
between Europe and the farmers, in agreement with the CAP reform for the period 2014–2020, namely:
– obtaining a reliable agricultural production that should ensure the national food security
and guarantee Romania’s population food safety, which, at the 2020 horizon, asks for doubling (at least)
the agricultural yields (average yields, 4300–4400 kg/ha compared to 2770 kg/ha conventional
cereals in the decade 2000–2010) and the crop and livestock production value and tripling the
value of processed agri-food production; these levels can fully meet the domestic needs of quality
food products and ensure a surplus of 5.5–6 bln. € agri-food products available for export;
– ensuring the ecological equilibrium of the rural area on the long-run, in sustainable terms,
through public, public-private or private investments in infrastructure, for the protection and
equipment of the national territory (irrigation systems, field protection belts, anti-flood, anti-erosion
protection hydro-melioration systems, afforestation of degraded and cleared land areas, etc.);
– conservation and protection of useful renewable natural resources (soil, air, water,
biodiversity) and sustainable use of natural agricultural resources, of soil in the first place, as main
natural renewable resource of Romania, biodiversity conservation, application of policies meant to
attenuate the climate change effects;
– balanced territorial development of agricultural rural economy and development of agri-
cultural and non-agricultural rural SMEs and increasing the active rural population’s employment level;
– equilibrating the Romanian food (and payments) balance and growth of the Romanian
agri-food exports;
– diminution of less-favoured rural areas and alleviation of severe rural poverty;
– optimization of the agricultural production structure and of the territorial distribution
of the farming systems (intensive specialized/multifunctional/conservative; modern/traditional; ecological/
biotechnological; food production/production of non-food raw products/bio-energy production);

Agricultural Economics and Rural Development, New Series, Year X, no. 2, p. 133–153, 2013
134 Păun Ion Otiman 2

– agro-tourism capital growth through the preservation of the landscape heritage of the rural area;
– getting the national education and scientific research system compatible with the
European system, ensuring its sustainable partnership with the Romanian agri-food system;
– elaboration of the Law on Romania’s agriculture orientation, as legislative support
necessary for carrying out the Agricultural strategy.
Key words: strategy, sustainable rural development, governance programs, objectives, food
security and safety.
JEL Classification: Q01.

In the period of transition to the market economy, for more than 20 years,
period equally divided into the “decade of reforms” and the “decade of accession”,
more than 25 documents and reports of “strategy” type were worked out.
In the first decade, the “decade of reforms”, the perspective of accession to
the EU seemed quite far away, even though Romania had submitted the accession
application in 1995, and the objectives of our country’s agricultural policies from
the respective period did not have in view getting closer to the European
agricultural policies as a first milestone. At the same time, the lack of financial
resources in overall economy, in agriculture implicitly, did not favour a strategic
approach similar to that of the developed EU Member States.
The studies on the agricultural policies in the period of transition from the
command economy to the market economy mainly used economic analysis tools
referring to the establishment of the private agrarian system, compatible with the
market economy, the agricultural sector transformation, through the utilization of
different sectoral policies; in the first decade, the focus was laid on the reprivati-
zation of land and assets (production means) of the former cooperative farms and
restructuring the state farms, while after 1996 the focus was laid on the reform of
prices and subsidies, based on the trade policies. We must emphasize that the way
to the market economy, of private type, was more difficult and took longer than in
most ex-socialist countries, due to incomplete, oscillating and not in few cases,
contradictory reforms.
In the field of agricultural policies and implementation tools, Romania has
been permanently searching to respond to the short time political objectives, with a
more or less electoral character, to the outside conditionalities imposed by the
international organizations to which Romania aspired to be a member of. These
challenges, different on the short and medium term, were practically substitutes for
a strategy, or better formulated, they were arguments to justify the absence of a
long-term clear and consensual strategic political approach in the agricultural sector.
The agricultural strategies that have been worked in Romania so far have
generally had a sectoral approach (cereals, milk, meat, fruit-vegetables, viticulture,
etc.) with more or less defined linkages between sectors or by agri-food chains
(modalities to use the raw vegetable production in the livestock sector, transformation
3 Romania’s Agri-Food and Rural Development Strategy 135

of the raw agricultural products into finite products by the agro-processing sector,
etc.). Both the horizontal and vertical flows, which target the entire agri-food
sector, and which generally lie at the basis of a deep reform in agriculture, have
been systematically neglected. With regard to the fundamental thematic for
constructing the agriculture development policies, it is normal that once the
problems are identified for each of these themes in part, different modalities,
methodologies, tools should be in place, the proposed solutions being in agreement
with the ideology or political vision of the parties or political alliances at governance.
In the second decade, the “accession decade”, the identified problems and
the proposal of solving modalities for each of the cross-cut policies on which
agriculture restructuring in view of accession depends, were closer to the left vision
(social-democratic) or to the right vision (liberal-conservatory), namely:
• the land policy mainly focused the ownership reform, by coming back
(with syncopes and incoherence) to the private agricultural land ownership,
followed by the issue of the land consolidation, organization and planning in
agriculture, having in view measures for parcel consolidation through the land
market and less by association or consolidation;
• the fiscal policy in agriculture had in view the utilization as instrument of
income collection to the state budget, as well as a consolidation instrument of
legally marketed production;
• the socio-professional policy in agriculture was the “key” to launching
the restructuring of agricultural production units and of farm competitiveness
increase;
• the infrastructure and agricultural services development policy is another
mechanism by which the state can stimulate the creation of the basic framework to
support agriculture competitiveness increase in Romania.
In more than 20 years of transition, both in the pre-accession and the
European integration stage, Romania’s agriculture evolution most often was not
based on coherent policies in relation to the long-term politically assumed
objectives through the agreement of accession to the EU
The purpose of the Agri-Food and Rural Development Strategy in the
period 2014–2020–2030 is mainly determined by the need to establish the guiding
lines for the sustainable development of the Romanian agriculture and rural area, as
one of the basic components of resuming economic growth in Romania. The
Strategy design has in view the realities of the rural area, which is both an
economic area and a social, cultural and ecologic, living environment, agriculture
being both an economic sector that provides agricultural products and raw
materials for the processing industry and a rural agri-culture with deep national
traditions on whose conservation, continuity and development Romania’s real
presence in the EU will largely depend.
Evaluating the present situation of Romania’s agriculture and rural area,
Romania’s EU membership and the need to integrate Romania’s agriculture
136 Păun Ion Otiman 4

development policies into the EU Common Agricultural Policy and into the
European Strategy for Intelligent, Sustainable and Inclusive Growth in the
European Union – Europe 2020, we consider it of stringent actuality for Romania’s
economy, in general, and for agriculture, in particular, to design the Agri-Food
and Rural Development Strategy for the period 2014–2020–2030.
The comparative analysis of the present development level of the rural and
agri-food economy makes it possible to formulate a few questions necessary for the
elaboration of the Strategy:
– Does the current level of rural economy, agricultural research and education in
Romania facilitate the application of European sustainable rural development
concepts included in the EU Common Agricultural Policy?
– Can the present level of Romania’s economy, in general, and of the rural
economy, in particular, in which a mentality hostile to cooperation still prevails,
support a (mostly necessary) fast rate of sustainable rural development in Romania?
– Can the current Common Agricultural Policy and the CAP for the period
2014–2020, which does not provide a direct support for agricultural production
increase in the EU, be applied as such in Romania as well, whose agriculture
should reach maximum yields in the years to come in order to bridge up the
performance gaps compared to the EU?
– Do the still great differences between the funding levels of the European
and Romanian farmers, which are maintained in the EU agricultural budget for the
period 2014–2020, attenuate or on the contrary, accelerate the discrepancies of the
Romanian agricultural yields and farm consolidation?
The strategic objectives of agriculture and rural development in Romania.
The Strategy, consensual from the political point of view, is the product of a
scientific, objective analysis of the agricultural and forestry potential, adapted,
endorsed and supported by all the political and technocratic forces, under the form
of a vector of development, with important objectives and legal reform and
restructuring procedures, as support or vehicle for their implementation.
In the future, the strategic document must be based on the governance
programs as support or implementation vehicle, which, in our opinion, should
represent a coating, a coverage of the strategic vector and not a factor of permanent
severance of the strategy, as things have unfortunately happened in Romania with
the successive governments in power, after 1989.
A thorough knowledge of Romania’s present agriculture and rural economy
reality is a sine qua non condition for the elaboration and application of a
coherent program on the medium and long term for the European
reconstruction of the Romanian rural economy, for increasing the contribution
of agriculture to the attenuation of the present crisis and to resume the sustainable
economic growth.
The national strategic framework, the European programs and projects for
agriculture have the sustainable rural development at their core, as sustainable
5 Romania’s Agri-Food and Rural Development Strategy 137

economic growth factor, which presupposes a strong rural economy, based on a

modern rural infrastructure, an adequate technical equipment of the rural
area of localities and rural dwellings by using the local natural resources (in
the rural area) renewable in the economic circuit, environment and landscape
protection and, as their effect, reaching an acceptable rural living standard,
through the alleviation of the severe poverty in the rural area.
The sustainable economic development can be reached, in the first place,
only if medium and long-term investments are made in the consolidation of
farms and agro-processing units, in advanced technologies, in the adequate
equipment of the rural territory, through irrigation and desiccation systems, anti-
erosion works, forest belts for the protection of fields, anti-flood systems, etc. The
direct financial support from the EU and national funds should be directed for
putting in effect these premises of the sustainable rural development. At the same
time, the legislative, institutional and financial actions should be intensified in
order to increase the competitiveness of the international and national trade
circuits, to increase the participation of the Romanian agricultural products on third
markets, the European Common Market in particular, as well as to attenuate the
risks and turbulences caused by the annual and multi-annual production and price
fluctuations. An increased focus should be laid on the extension of the regional and
local market.
The rural area development is based on the sustainable rural
development concept, the extension and diversification of the rural economy
presupposing the harmonious blend between the agricultural (and forestry)
component and the agri-food and non-agricultural rural economy component,
based upon the following principles:
1. Agriculture, in the predominantly agricultural areas, and forestry, in the
rural mountain areas, represent the backbone of the rural area. Although
significant changes have been lately produced in the role and function of
agriculture, this remains the main component of any rural development strategy. At
the same time, as regards agriculture development, the focus must change from its
productivist aspect to its multifunctional character.
2. Having in view the fact that Romania’s most valuable renewable natural
resource is soil (agricultural land), the main decision-makers of the country have
the political, economic as well as moral obligation towards the present generation
as well as towards the future generation, to ensure, through adequate agricultural
policies, the sustainable exploitation of the soil resource at the level of its
productive potential. The increase of the agri-food production and forestry
economy should not be seen as an objective “per se”, but rather as an objective of
providing food security for Romania’s population as well as a prospective
objective of Romania, having in view the world demographic forecast estimated at
138 Păun Ion Otiman 6

about 9 billion people for the next two-three decades. The increase of agricultural
yields at the level of the soil (ecologic) natural potential must be obligatorily
correlated with the absorption potential of the domestic and foreign markets.
3. The priority of agriculture and rural economy modernization according the
National Strategic Framework, in our vision, should be based on the vital
economic and social functions of the agri-food system: ensuring a balanced food
supply for the population (food safety implicitly), the necessary raw products
for the non-agricultural activities and an active and profitable export of agri-
food products, increasing the landscape resources of the countryside, while
ensuring a decent living standard and environment protection. At the same
time, the rural economy, in general, and agriculture, in particular, represents a
huge outlet for the upstream and downstream branches, directly contributing to
the development of non-agricultural branches, as well as of the sectors related to
agriculture (and forestry).
The priorities of the Strategy for the period 2014–2030 were formulated
starting from the functions of the rural area and economy, of Romania’s
agriculture, the need for their fast development, the new partnership between
Europe and the farmers, according to the CAP Reform for the period 2014–2020,
namely:
– Obtaining an agriculture and food production to ensure national food
security and to guarantee the food safety for the population through:
• doubling the agricultural yields in the next ten years, compared to the
2000–2010 decade;
• doubling the value of crop and livestock production in the next decade,
compared to the production of the year 2010;
• doubling the value of processed agri-food production compared to the
year 2010;
– Fully meeting the domestic needs of high-quality food products and
obtaining a surplus of food products, available for export;
– Reaching long-term sustainable ecologic equilibrium of the rural area
through public, public-private or private investments in infrastructure works for
territory protection and equipment (irrigation systems, hydro-melioration protection
systems, protective forest belts, afforestation of degraded and cleared land areas,
etc.);
– Conservation and protection of renewable natural resources (soil, water,
air, biodiversity) and sustainable use of agricultural natural resources, of soil in the
first place, biodiversity conservation, application of policies targeting the climate
change effects attenuation;
– Getting the national education and scientific research system compatible
with the European one, ensuring a sustainable partnership between this and the
Romanian agri-food system;
7 Romania’s Agri-Food and Rural Development Strategy 139

– Balanced territorial development of the agricultural rural economy,

development of rural SMEs and employment growth, by providing support to the
active rural population in the first place;
– Equilibration of the Romanian food balance (and of the balance of
payments) and increase of the Romanian agri-food exports;
– Contraction of less-favoured rural areas and severe rural poverty alleviation.
Romania has only one chance for agriculture development: massive, yet
rational allocation, optimum if possible, of investment capital in rural
infrastructure, agricultural territory equipment (about 1.7 mil. irrigated ha,
magistral canal for irrigations and navigation Siret-Bărăgan, planting the field
protection belts on about one million hectares in the driest areas, modernization of
agricultural holdings, development of enterprises for storage-processing of agri-
food products (not only cereals) as well as the increase of operation capital both
from own sources and from advantageous banking credits provided to agricultural
holdings to support the proposed production levels for the 2015, 2020, 2025, 2030
horizons).
From the calculations made, it results that Romania has a food potential for
38.5 million persons, at the 2030 horizon, and availabilities for export and non-
food consumption of agricultural raw products of about 49–50 billion €.
The scope of Romania’s Rural Strategy is mainly determined by the need
to establish guiding lines for Romania’s agriculture and rural area sustainable
development as one of the basic components for resuming Romania’s economic
growth.
The need of the Strategy is determined by three main factors of agriculture
development:
– natural, material and human resources of the Romanian agriculture;
– ecological suitability of Romania’s agricultural resources to supply agri-
food products on the world market;
– need to ensure the national food security and to guarantee food safety for
the population.
In one word, the construction of the Rural Strategy is based on three pillars:
AGRICULTURE, FOOD AND ENVIRONMENT, each of these having a vital
importance for the social peace in Romania and for the continuous improvement of
the Romanian rural living.
Drawing up the National Strategic Framework for Rural Areas is based
on two fundamental ideas if its construction:
a) the current situation of agriculture and the ecologic and economic potential
of the rural areas from Romania;
b) Romania’s EU membership and the need to integrate Romania’s
agriculture into the European agri-food area and to get it compatible with the
Common Agricultural Policy of the EU.
140 Păun Ion Otiman 8

a) Current situation of Romania’s agriculture and rural area

We shall next present the realities of the Romanian rural area after 20 years
of agrarian reforms, the current situation of agriculture and rural area in
Romania being the result of political, economic, juridical and social actions and
events accumulated throughout the 20th century, as well as of the effects of the
current agricultural policy after 1989.
Four major changes (four fractures of the Romanian agricultural structures in
only one century can be considered – the great agrarian reform in the year 1921,
the agrarian reform of the year 1949, agriculture collectivization in the period
1949–1962 and the effects of the Land Law of the year 1991 and of its related
laws) made it impossible to conceive, and mainly to implement a long-term
agricultural project in Romania, similar to that in most (West) European
countries. The major successive system changes resulted in the instability and,
which is most critical, in the absence of continuity, stability and sustainability of
the national agricultural system.
The effects of the agricultural policies (reforms, restructuring, adjustment),
applied on a contradictory basis, lacking continuity after 1989, generated a fluid,
non-structured, non-performant, non-competitive, mostly subsistence agriculture;
this situation was accompanied by a shift from the large-sized farming units (state
farms, cooperative farms), characteristic to the Eastern European socialism, to the
large farming units (associations, companies) in an early stage of capitalism with a
total area of more than 5 million hectares into ownership.
The prevailing reality of the Romanian rural area is marked by serious
economic and social phenomena, the most obvious being the following:
– disagrarization, as a result of non-farming the agricultural land and
turning it into idle land (about 1.5–1.7 mil ha/year), disuse of natural pastures,
which grew wild (over 1–1.2 mil ha), of the vine and fruit-tree plantations,
utilization of only maximum 8–10% of the country’s irrigation potential;
– severe decline of livestock production importance in agriculture, by the
drastic diminution of livestock herds, loss of their genetic potential, destruction of
most livestock production premises, etc.; the share of livestock production in total
agricultural production reached about 35%;
– obvious social and physical desertification of the rural area, depopulation
and strong demographic ageing of the rural population, decline of agricultural
labour force in quality and professional terms;
– existence of huge poverty pocket, which is growing larger in many rural
areas from Romania;
– the rural economy is mainly a primary economy, agriculture accounting
for about 60% of its structure (compared to about 14–15% in EU), with negative
effects upon the employment of active rural population, low processing level of
agricultural raw products and consequently low value added and low taxation of
agricultural and food production;
9 Romania’s Agri-Food and Rural Development Strategy 141

– quasi-total disappearance of the social rural economy (handicraft cooperatives,

small village handicraft workshops and private family workshops providing
services); this phenomenon resulted in about one million small rural craftsmen
becoming unemployed or being obliged to retire before their due retirement age;
– rapacious exploitation of forests, mainly in the areas with the most
valuable forests of the country: Susana, Haughtier, Murmured, the Pausing mountains;
– lack of real administrative autonomy and decentralization (administrative
subsidiarity) in the case of rural development (either local or regional), which is a
true “chimera” in Romania’s case. All the rural development programs (European,
national, regional or local) are evaluated, approved and funded only at Bucharest,
by the ministries. This aspect results in huge promotion, funding and execution
costs, and furthermore, it generates permanent and sustained corruption (most often
under coverage and with political control), absence of transparency, equity and
equilibrium.
The analysis of causes that generate major deficiencies in rural development,
technical and economic non-performance in agriculture reveals a chronic scarcity
in the allocation and utilization of funds, of production factors, together with a
defective management on most agricultural holdings and agricultural commercial
companies and agro-processing SMEs, as well as great deficiencies in the
management of the chains taking over, storing, processing and marketing the agri-
food products (agricultural market operation).
The effects of capital scarcity are materialized into low agricultural yields,
compared to those in the EU: 40–45% of average cereal yields, 35–40% of the
value of primary agricultural output (800–900 €/ha in Romania versus 1800–2000
€/ha in EU) and only 1 € processed food production obtained from 1 € primary
agricultural production, compared to 2.5 – 3 € in EU.
The analysis of the Romanian agri-food consumption data reveals negative
aspects from the economic and social point of view, both for agriculture and for the
general economic balance of the country:
– the share of food expenses in total population’s expenses (about 40–45%) is
maintained at extremely high levels, with values twice as high compared to the
EU-25 average and almost 2.8–3 times higher compared to EU-15 average;
– although the share of food self-consumption was significantly down, from
64.9% in the year 2000, to 41% in the year 2007, it is still the highest in EU-27,
three times higher compared to the EU-15 Member States;
– in absolute value, the food consumption per capita in Romania is at the
minimum level of subsistence, with 9.41 RON/day (about 2.24 €/day) in 2009,
much under the daily consumption (by about 2.2–2.5 times lower) of the average
consumption level of the EU countries;
– the food expenses from imports have a too high share, unacceptable for
an agricultural country like Romania (17.9% of the food consumption and
34.1% of the cash food expenses).
142 Păun Ion Otiman 10

The value of foodstuffs imported by Romania reached 4.66 billion euro in the
year 2012, while the share of imported food products in Romania’s population’s
food consumption increased from 11.4% in the year 2000 to 25.1% in 2008, yet
down by 3.3% in the year 2009, due to the diminution of imported food
consumption as a result of the population’s incomes diminution.
It is important to highlight that more than 60% of Romania’s food imports
are products that could be obtained from the domestic production: meat and
meat preparations (more than 32% in recent years), grains and wheat flour
(maximum 20% in 2003, yet 8% in 2007), soybean and soybean oilcakes
(almost 50% of the necessary amounts after 2005, when the cultivation of
GMO soybean was banned; in the period 2001–2004, the trade balance in
soybean and soybean oilcakes was positive), fresh vegetables, fruit and flowers
(8–12% each year in the period 2000–2009), sugar, tobacco, hops, etc.
The constraining factor in Romania’s agriculture is represented by the assets
and operating capital: the endowment of a Romanian farmer is by 16–17 times
lower on the average compared to a EU farmer (540 € /farmer in Romania
compared to 9000–9200 €/farmer in EU); the operation expenses in cereals account
for 50.5% in Romania compared to France, while the banking credits provided to
the Romanian agricultural holdings are 15–16 times lower compared to the credits
provided to the EU farms (110€/ha in Romania and 1700–2000€/ha in EU).
b) On Romania’s EU membership and the requirements of Romania’s
agriculture integration into EU CAP
The technological performance gaps, measured by the average yield/ha in
cereals, are obvious not only when we take into consideration its low level but also
by its strong fluctuation and instability. In countries like France, Italy and
Germany, an annual production differential (difference between maximum and
minimum yearly yield) of about 1300 kg/ha is noticed in the cereal crops, in an
average multi-annual yield of 6300 kg/ha (20.6%); by comparison, in Romania the
maximum differential is 2000 kg/ha, in an average multi-annual yield of only
2770 kg/ha (74.1%), which undoubtedly proves the lack of performance and the
great yearly agricultural fluctuations in Romania, as well as the unacceptable
dependence on the weather conditions.
The non-performance of the yearly agricultural yields is generated in the
first place by the still (too) high dependence on the annual weather conditions
(meteo-dependence of agricultural production) as the irrigation systems are largely
degraded and non-functional, by the precarious farm endowment in irrigation
equipment and the high cost of irrigation water, as well as by the use of obsolete
agricultural technologies, with low application of performance enhancing inputs
(fertilizers, crop protection substances), as well as of obsolete equipment from the
point of view of energy consumption and productivity. The drought, which is
increasingly frequent, negatively impacts the agricultural yields, mainly in the
Romanian Plain, Dobrogea and Moldova, where the largest irrigations systems are
found, built up in the period 1960–1990, yet non-functional or non-utilized for
about 20 years.
11 Romania’s Agri-Food and Rural Development Strategy 143

Rural development objectives and priorities: horizon 2014–2020–2030

In the EU rural regions, economy is significantly influenced by the agri-
cultural activity, and the construction of the Strategy under the three priorities of
post-Lisbon Agenda is based on the following:
– intelligent growth – development of knowledge and innovation-based
economy (the technological research and development combined with the efficient
utilization of existing resources enhance productivity);
– sustainable growth – promoting a more efficient economy from the point
of view of resource utilization, more competitive and greener, may lead to the
supply of “public goods” (e.g. habitat conservation, biodiversity and rural heritage
maintenance) that can contribute, in the envisaged areas, to job creation through
agriculture extensivization and supply to local markets;
– favourable growth of social inclusion – promoting an economy with a
high employment rate, which should contribute to social and territorial inclusion
(about 13.6 million people are directly employed un agriculture, forestry and
fisheries and other 5 million are employed in the agri-food sector, summing up
8.6% of total jobs in EU and 4% of EU GDP).
EU agriculture is confronted with a series of problems generated by the
economic crisis, namely:
– food security problems concerning high discrepancies in production and
distribution;
– impact of price volatility upon costs and prices, both for the buyers of
agricultural products and for farmers;
– price variations that are not reflected in the food chain;
– productivity decrease and trade deterioration;
– pressures for production intensification due to cost increase;
– attenuation of climate changes and adaptation, conservation of natural
resources, improvement of resource efficiency and sustainable development at all
levels.
These would be the reasons why the CAP Reform should approach both the
market and the political failures, in the context in which:
– the markets need more transparent signals;
– the policies should target new challenges;
– productivity and innovation should target sustainable growth.
The European Strategy for Smart, Sustainable and Inclusive Growth –
Europe 2020 establishes the modalities by which CAP must solve up the above-
mentioned challenges.
The economic field will have as political objective the viable production for
food that should contribute to agricultural income increase and limit its annual and
144 Păun Ion Otiman 12

multi-annual fluctuations. Price and income volatility as well as the natural risks
are much more pregnant than in other sectors, and farmers’ incomes and
profitability are at lower levels that those in the other sectors.
The improvement of the agricultural sector competitiveness must consolidate
the position of this sector in the food chain. The agricultural sector is fragmented
compared to other sectors in the food chain, these being better organized and with a
greater bargaining power. Furthermore, the European farmers have to face the
competition on the world market, at the same time having to comply with high
environment protection, food safety and quality and animal welfare standards.
The compensation of production difficulties in the areas with specific
natural handicaps, as a high land abandonment risk exists in these regions.
Although the greenhouse gas (GHG) emissions in agriculture have decreased by
20% since 1990, sustained efforts are needed to reach the EU Agenda energy and
climate objectives, in order to cut the GHG emissions, to adapt and bring a positive
contribution by carbon sequestration and biomass production, based on innovation.
Climate changes, soil depreciation, water and air quality, habitats and biodiversity
should be also approached.
As regards the environment and climate changes, the political objective is
represented by the sustainable management of natural resources and attenuation
of climate changes that should guarantee the sustainable production practices and
to ensure the supply of public goods that respect the environmental conditions
as many public benefits generated by agriculture are not remunerated through a
normal operation of markets, to favour the innovation-based ecological development –
green growth, which requires the adoption of new technologies, development of
new products, change of production processes and support the consumers’ new
expectations, to have in view the actions reducing the effects of climate changes,
as well as to permit agriculture to adapt to climate changes. As agriculture is
particularly vulnerable to the climate changes impact, a better adaptation of this
sector to the effects of weather fluctuations can reduce the negative effects of the
weather changes.
Even though a great number of rural areas are increasingly influenced by
factors external to agriculture, this remains the engine of the economy in most
European countries. The vitality and potential of many rural areas remain strongly
linked to the existence of a competitive and dynamic farming sector, attractive
for the young farmers. This particularly holds true for the predominantly rural
areas, where the primary sector accounts for about 5% of the value added and 16%
of the number of employees in the new member states, where it is very important to
consolidate the recent productivity growth as well a to reach the full agricultural
potential. Furthermore, agriculture plays an important role in the rural areas by
13 Romania’s Agri-Food and Rural Development Strategy 145

generating additional economic activities, mainly in close connection to agro-

processing, tourism and trade. In many regions, mainly in the new member states,
agriculture is both the backbone of the rural economy and the foundation stone of
local traditions and social identity.
The European programs and projects for agriculture have the sustainable
rural development at their core, as sustainable economic growth factor, which
presupposes a string rural economy, based on modern rural infrastructure, an
adequate technical equipment of the rural territory, localities and dwellings, the
utilization of local natural resources (from the rural area), renewable in the
economic circuit, environment and landscape protection, and, as an effect of these,
a decent rural living standard.
The new philosophy of rural area development is based on the sustainable
rural development concept, which presupposes the harmonious blending of the
agricultural (and forestry) component and the rural agri-food and non-agri
cultural economic component, based on the following principles:
– concordia between the rural economy and the environment (economy-
ecology equilibrium);
– the sustainable, durable development programs should include a medium
and long time horizon;
– diversification of the agricultural economy structure, through pluriactivity,
in the first place by expanding the agri-food economy, the non-agricultural
economy and rural services;
– naturalization of rural area, by the most intact preservation of the natural
environment;
– the anthropized environment, created by humans, should be as close as
possible to the rural natural environment;
– the utilization of local natural resources in the rural economic activity, of
renewable resources in the first place.
Having in view the balanced geographic structure of Romania’s agricultural
land resources, the distribution by relief units, the ecological areas of our country
enable a balanced practice of the different farming systems (intensive, organic,
multifunctional, conservative, biotechnological), and out of this reason the strategy
should decide upon the forms of agriculture and agrarian and rural structures that
Romania should develop:
– what type of agriculture Romania should practice, for what kind of
social and economic future of the country?
– what type of agriculture, for what kind of environment?
– what type of agriculture, for what type of rural development?
146 Păun Ion Otiman 14

– what type of farming structures, so as to make them comparable and

competitive with the West-European ones?
– what kind of agrarian policies should Romania promote so as to get
them compatible with those from the European Union?
If we strictly refer to the present orientation of Romania’s agriculture, after
the accession to the EU, the dilemmas are even more numerous:
– conventional and/or biotech agriculture;
– conventional and/or organic agriculture;
– modern and/or traditional agriculture;
– family and or/large-scale agriculture;
– semi-subsistence (subsistence) and/or commercial agriculture;
– intensive and/or conservative agriculture;
– multifunctional and/or monoculture agriculture;
– food and/or biofuel production.
Starting from the agricultural performances and the low development level in
Romania, seen on a comparable basis in time with those from the EU, we consider
that these are at the level of the West-European countries from the period 1955–
1960 and consequently, Romania’s agricultural strategy should focus on farm
consolidation and the massive increase of agricultural yields in the first place,
through massive investments in the Romanian agri-food system.
Intensive farming. Romania should place the development of intensive
farming in the favourable ecological areas at the core of its agrarian policies.
Without increasing the technical performances of agriculture in the crop and
livestock production sectors up to the average level of EU-15, at 2020 horizon, and
to the average level of the countries with a developed agriculture, at 2030 horizon,
Romania’s food consumption will continue to depend on the Community agri-food
trade.
Organic farming, as variant of multifunctional agriculture, presupposes the
increase of the production technology components with an increase labour input,
and consequently, the attraction of additional labour force in agriculture. It is
estimated that at present, in the rich countries, organic farming is practiced on
about 4–5% of the agricultural land area, and due to the much higher eco product
prices, one cannot expect a significant increase of areas under organic crops,
on a “massive ecologization” of agricultural production implicitly in the next
2–3 decades. As a result, the increase in number of rural population employed on
organic farms cannot be significant, yet it can relevant for the new concept of
agriculture and for the organic farm philosophy.
Multifunctional agriculture, even though from the strict point of view of
yields and profit is less performant for the farms that practice it (compared to
15 Romania’s Agri-Food and Rural Development Strategy 147

intensive farming), it is preferred from other points of view (tourism, landscape,

environment protection, ecologic, social). Multifunctional agriculture, in principle,
complies with all the economic functions as in the case of intensive and specialized
farming, yet acquiring new functions, namely:
– conservation of vital biodiversity elements (flora, fauna, soil, air, water),
through their sustainable use under ecological farming practice that ensures the
stability and preservation of agro-eco-systems;
– harmonization of the social and cultural functions of the rural area, in close
relation to a healthy and diverse agriculture;
– production of energy raw materials (new and extremely important function
in the areas with surplus food production);
– tourism capital increase, through the landscape heritage preservation and
enrichment.
Multifunctional agriculture presupposes the use of an increased number of
persons employed in agriculture, in longer periods of time throughout the
agricultural year, compared to intensive, specialized, conventional agriculture.
The conservative agriculture, through the applied technologies, essentially
contributes to the agricultural environment protection, diminution of carbon
dioxide and combustion gas emissions (due to the mechanical works), quasi-
permanent green cover of soil, biodiversity conservation, landscape improvement
and enrichment, and to the optimum use of the main agricultural resources – soil
and water in particular. Having in view the long-term effects of conservative
agriculture upon the environment, upon soil in the first place, the technical
performance difference of the respective farms must obligatorily get financial
and fiscal support.
Agriculture source of green energy. The first far-reaching energy crisis in
the eighth decade of the 20th century, as well as pollution diminution represent
new challenges for agriculture. The bioenergy agricultural production is one of
the energy alternatives to the crisis of fossil energy sources, which will be
exhausted on shorter or longer term; thus, agriculture has acquired a new function:
producer of raw energy materials. The EU directives provide for the increase in
share of biofuels from 2% of total energy consumption in the year 2007 to 10% in
the next ten years and to 20% after 2020.
Biotech agriculture. The accelerated evolution of research in genetic
engineering and biotechnology had a direct effect in agriculture, materialized into
the unprecedented assimilation of scientific results, resulting in the increase of
areas under genetically modified crops (GMO crops), used both for increasing the
production of foodstuffs and for the increase of agriculture share in energy
economy. As regards the energy function of agriculture, we consider that the major
148 Păun Ion Otiman 16

income of biotech agriculture on farm economy should be highlighted. In 15

years (1996–2010), the world area cultivated with GMO crops (soybean, maize,
rapeseed, cotton) increased by about 10 mil. ha/year, to reach 150 mil. ha in the
year 2011. Having in view the ecological structure of the national agricultural area,
Romania has the possibility to cultivate about 500,000 ha with GMO soybean and
about 1.5–2 mil. ha with GMO maize (out of the 3 mil.ha under maize crop), these
resulting in a gain of agricultural value of at least 2.5–2.5 billion € for the export of
concentrated feed /maize and soybean kernels and soybean oilcakes).
As agriculture has multiple functions, it is obvious that the society, as
beneficiary of these functions, should pay not only for the agri-food products, i.e.
foodstuffs, but also for the indirect services that contribute to environment
protection, habitat and landscape improvement, etc. The current price system, the
removal of subsidies for making food cheap, in the absence of financial com-
pensation forms for the subsidiary services of agriculture, will have negative
consequences upon farmers on the medium term, and indirectly, unfavourable
effects with regard to food safety on long term.
The mountain economy, through its national resources, represents on of the
economic and social problems of first importance for Romania. As Romania’s
mountain area covers about 73,300 km2 (29% of the country’s area), out of which
44,300 km2 under forests, 24,000 km2 under natural pastures and about 5,000 km2
under arable land, where 2.1 million people are living, on 1.2 million households
who have about 2.9 mil. ha agricultural land into ownership, we can relatively easy
assess the mountain economy importance for our country.
The mountain agricultural economy, the forestry economy and the agro-
tourism economy are most intimately intermingled in the mountain area. The
mountain agricultural economy, mainly ecological or organic in its most part,
based on pastoral economy (raising dairy cows, young cattle and pastoral activities
related to sheep raising), can be mingled, through pluriactivity, with harvesting and
processing of wild berries and medicinal herbs from the country’s spontaneous
wild flora, and both connected with agro-tourism activities in winter or summer
time or related to pastoral, ethno-folkloric, religious, spiritual activities, outdoor
sportive and hiking activities; all these represent significant adding value
modalities in the mountain rural economy, modalities to put into value the natural
capital of the mountain areas. A well-conceived, applied and sustained mountain
economy can represent an opportunity for Romania, on the condition that the
governmental support policies are adequate to the mountain area.
The forestry economy must be based on three fundamental directions for the
regeneration and increase of the country’s area under forests, namely:
– limitation of annual cuttings to maximum 15–16 million m3 timber volume;
17 Romania’s Agri-Food and Rural Development Strategy 149

– annual planting schemes targeting an average national forest coverage of

40% by the year 2035 (Forestry Code provision), out of which at least 15%
coverage in the plain area;
– increasing the timber processing, so as to reach the average European level
per cubic meter (260 €/ m3 in EU versus 80–90 €/m3 in Romania in 2010).
In order to reach sustainable rural development, the implemented schemes
must ensure a rational administration and conservation of resources under the
conditions in which climate is changing globally and locally, population is steadily
growing and the natural resources are limited. The design of overall projects must
have in view hydrological and relief criteria, in order to eliminate the random,
chaotic and subjective interventions and actions, to take into consideration the
current water management, land reclamation, forestry and tourism (archaeological
sites) infrastructure, the technical infrastructure, etc. Besides the agricultural
activity, the projects should integrate all the activities included on a delimited area,
having as main objective the sustainability of resources and environmental
conditions.
In the projection of strategic objectives of the agri-food system development
in Romania, the determination (forecast) of the following synthetic indicators
was taken into account:
1. value of primary agricultural production (crop and livestock) and its
structure;
2. value of agri-food production and its destination: domestic food
consumption, export/import of foodstuffs;
3. forecast of food consumption/capita/year in Romania;
4. population fed from agri-food production (Romania’s inhabitants, food
for export);
5. capital investments per hectare for Romania’s agri-food production
support.
The forecast of the main synthetic objectives of the agri-food system
strategy was based on calculation algorithms for the following production factors:
– ecological resource utilization;
– investment capacity in technological factors (irrigations, production inputs,
agricultural environment protection);
– primary (crop, livestock) agricultural production structure;
– index of primary agricultural production processing into finished food
products;
– population’s agri-food consumption value evolution.
150 Păun Ion Otiman 18

Table 1
Evaluation of the Romanian agri-food system production capacity
(horizon 2015, 2020, 2025, 2030)
Crt. Strategic horizons
Item
no. 2010 2015 2020 2025 2030
1 Ecological resources utilization level 0.39 0.50 0.61 0.72 0.83
2 Average yield of conventional cereals, kg/ha 2,770 3,500 4,270 5,040 5,810
3 Useful arable area, thou.ha 11,000 11,000 11,000 11,000 11,000
4 Agricultural production in cereals equivalent, mil. t 30.5 38.5 47.0 55.4 63.9
5 Agricultural crop production value, bln. € 12,410 15,670 19,130 22,550 26,000
6 Crop production /livestock production ratio 0.35 0.40 0.45 0.50 0.55
7 Agricultural livestock production value, bln. € 6,680 10,450 15,650 22,550 31,800
8 Primary agricultural production value, bln. € 19,090 26,120 34,780 45,100 57,800
9 Agricultural production processing coefficient 1.04 1.28 1.52 1.76 2.00
10 Agri-food production value, bln. € 19,850 33,430 52,870 79,380 115,600
11 Food consumption, €/capita/year 1000 1500 2000 2500 3000
12 Food consumption, bln. €/an 18,300 33,000 44,000 55,000 66,000
13 Population supplied with foodstuffs from domestic 18.3 22.3 26.44 31.75 38.50
production, mil. Inhabitants
14 Import/ Export, mil. € –1,550 +430 +8,870 +24,380 +49,600

Thorough and long standing scientific research, carried out both in Romania
and in other countries, proved that there is a correlation between the ecological
(natural) potential that expresses soil (ecological environment), the economic
potential that expresses the size and quality if capital invested in production factors
(inputs) quality and the obtained harvest (outputs).
In Romania’s case, the experts in ecological and economic soil assessment
from the Academy of Agricultural and Forestry Sciences demonstrated that the
ecological potential of arable land is 7,000–7,100 kg/ha conventional cereals
(ecological potential utilization level (Ke = 1), while in the case of France the
ecological potential is 8,250 kg/ha.
The present (1990–2010 average) utilization level of arable land natural
potential is 0.39 (2,770 kg/ha), this level being determined by two restrictive
factors: value per hectare of agricultural inputs (about 700 euro/ha, compared to
1,400–1,500 euro/ha in France) and the drastic diminution of irrigated areas (which
at present are insignificant, i.e. under 3% of the arable land area and under 8% of
Romania’s area equipped with irrigation facilities).
It undoubtedly results that the primary factor of Romania’s agriculture
underdevelopment and mediocre performance is represented by the precarious
allocation of investment capital and operating capital, which results in production
underperformance (low average yields per hectare and animal head, about 35–40%
of the EU average), which do not put into value the ecological (natural) potential of
the most important natural resource of Romania: agricultural land.
19 Romania’s Agri-Food and Rural Development Strategy 151

It must be unequivocally specified again, as article of faith of those who

conceived the Strategy for the country’s rural development, that Romania has only
one chance for agriculture development: the massive, rational and optimum
allocation of investment capital in rural infrastructure, agricultural territory
equipment (about 1.5–1.7 mil. irrigated ha, planting of shelter belts for field
protection, about 1–1.2 mil. ha in the driest areas), modernization of agricultural
holdings through the energy base renewal and the renewal of agricultural
equipment, development of agri-food products storage-processing enterprises,
as well as the operating capital increase, both from own sources and on the basis
of advantageous banking loans provided to the agricultural holdings, to support the
proposed production levels for the time horizons 2015, 2020, 2025 and 2030
(Figures 1–8).

1 6000 [kg/ha]
5810
0.9 5040
0.8 5000 4270
0.7 4000 3500 3
0.6 2770
0.5 3000 2
0.4 2000
0.3 0.39 0.50 0.61 0.72 0.83 1
0.2 1000
0.1 0
0
2010 2015 2020 2025 2030
2010 2015 2020 2025 2030

1. Average cereal yield EU-12 (1960–1965)

2. Average cereal yield EU-27 (2005–2010)
3. Average cereal yield EU-15 (2005–2010)

Figure 1. Crop production capacity forecast – Figure 2. Average cereal yield forecast.
cereal equivalent.

60 [bln. €] 58 [Kp] 2.00*

2 1.76
Crop production 1.8
50 45 1.52
Livestok production 45 1.6
40 1.4 1.28
35 50 % 1.2 1.04
26
30 1
55 % 55
19 60
0.8
20 0.6
65 % 50
% 0.4
10 % 45
40 0.2
0 35 0
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

* EU-15 average (2010) (€ FP/€ AgP)

Figure 3. Agricultural primary production value Figure 4. Agricultural production processing

and structure forecast (crop + livestock). coefficient forecast.
152 Păun Ion Otiman 20

120 [ bln. € ] 115.60 [€/capita]

3500
Domestic food consumption 3000**
100 3000
Food imports 79.38 2500
80 2500
Food exports 2000
2000
60 52.87 1500
1500
40 33.43 1000*
19.85 66 1000
55
20 44 500
33
18.3 0
0
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030
* food consumption in Romania, 2010
** food consumption in EU-15, 2010
Figure 5. Agri-food production and domestic food Figure 6. Annual consumption
consumption forecast. forecast €/capita.

40 [mil. inhab.]
2500
35 Export availability 2100
30 Romania's population 2000
20.2 1700
25 13.45
8.1 1500 1350
20 4
15 1000
1000
700
10 18.3 22.3 26.4 31.75 38.50
5 500

0
0
2010 2015 2020 2025 2030 2010 2015 2020 2025 2030

Figure 7. Forecast of population fed from Figure 8. Capital investments – euro/ha.

Romania’s agri-food production.

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